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Good morning and welcome to Henkel Half Year 2020 Results Conference Call. With us today are Carsten Knobel, CEO; Marco Swoboda, CFO; and the Investor Relations team.
[Operator Instructions]
Please note that there will be a live webcast of today's conference call, including the Q&A session. In addition, a replay of the conference call in the Q&A session will be available on our website www.henkel.com/ir for a certain period of time. By asking a question during the Q&A session, you agree to both the live broadcasting, as well as the recording of your question, including salutation to be published on our website. Here, we will briefly mention your name and the company you are representing.
At this time, I'd like to turn the call over to Mr. Knobel. Please go ahead, sir.
Dear investors and analysts, good morning from Dusseldorf and welcome to our conference call on the first half year of 2020. Thank you for joining us. I hope that you and your loved ones are really doing well no matter where you are in the world.
I'm joined today by Marco, our Chief Financial Officer.
Good morning.
Before we start, let me begin this call reminding everyone that this presentation, which contains the usual formal disclaimer to forward-looking statements within the meaning of relevant U.S. legislation can be accessed via our website at henkel.com/ir. The presentation and discussion are conducted subject to this disclaimer. I will not read the disclaimer, but we take it as read into the records for the purpose of this conference call.
What's on our agenda today? First, I'm going to lead you through the key developments in the first half of this eventful year and the progress update on where we stand in executing our purposeful growth agenda. Then, Marco will comment the detailed financials for the first half of the year. And after the presentation, we are looking forward to answering your questions.
The COVID-19 -- the global COVID-19 pandemic and its implications on economies and societies across the globe have affected our businesses with full force. While we delivered an almost flat top line development in the first quarter of 2020, the impact of lockdown measures in key markets and at times sharp declines in industrial demand impacted our sales and earnings performance, especially in the second quarter.
From the very beginning, the health, safety and the wellbeing of our employees was our highest priority. Thanks to our effective crisis management approach, the strong commitment of our teams and the breadth of our portfolio, we could balance the overall effect on the group. All countries, business units and functions quickly adapted to new market realities and arrived at new levels of speed and efficiency.
As one team, we realized group sales in the first six months that amounted to €9.5 billion, despite the disruptive environment, nominally 6% below the prior year period; organically, minus 5.2% with a differentiated development by business unit.
Adhesive Technologies experienced strong headwinds from significant drops in industrial and automotive production and shutdowns of many customer production sites globally, especially in the second quarter. For Beauty Care, the Hair Professional business was hit by salon closures in key markets. The retail business experienced both positive and negative effects depending on the categories, overall coming in almost stable in terms of top line. And Laundry & Home Care sustained very strong broad-based sales growth in the first half. Nevertheless, we are not blind of our weak market share development in North America.
These are extremely challenging times for our employees, our customers and consumers and our business partners. They require solidarity, team spirit, resilience and courage, and not least, entrepreneurial thinking. I am convinced that the actions we have taken to respond to today's challenges will help us to emerge stronger from the crisis.
We have a rock solid foundation to rely on -- including low debt levels and have shown resilience when it comes to cash flow performance. We did not ask for state support, neither did we send our employees on short-term work.
We paid out a dividend on prior year level, and we can build on our purposeful growth agenda, which is confirmed by the current environment. The execution of our targeted initiatives is in full swing, and I will give you a detailed run through that a little bit later.
Looking into the remainder of the year, our business environment remains volatile and uncertain regarding the further development of the COVID-19 pandemic and its impact on global economy.
In many parts of the world that already experienced the first wave of infections, we see numbers rising again. As per today, we cannot predict our full year performance with sufficient reliability. Thus, we continue to not provide a forecast for the full year 2020 at this point of time.
Let me elaborate a little bit more on our business environment in light of the COVID-19. In the first quarter, governmental lockdown decisions in China caused production in many industries to stop and shops to close for some time. Demand dropped significantly in the region. Since March, the global spread of the pandemic affected us in most of our key markets, with a more pronounced picture in the second quarter.
The second quarter was thus clearly more demanding from a business environment perspective, as evidenced by the development of the global industrial production index and the changes in consumer behavior triggered by the COVID-19 outbreak and governmental restrictions implemented in response.
COVID impact on each country's economy and society differed in timing and intensity, as you can see on the governmental lockdown heat map on the right side of this chart. However, all regions with a few country exceptions were strongly affected by the pandemic, experiencing substantial declines in GDP and consumer demand. In addition, we observed sometime significant changes in consumer behavior with different impacts from category to category.
For us at Henkel, headwinds from COVID-19 on our businesses and sales peaked in April and May. Hygiene restrictions and lockdown measures are being lifted in many countries and we are seeing gradual recovery trends in June and also in July. Nevertheless, the overall situation remains uncertain and volatile.
Thanks to our broad-based portfolio and our immediate global crisis management, we mitigated overall impacts on our performance. Individual developments of our businesses, however, varied considerably, driven by disruptive industrial and consumer demand changes and the pandemic.
This is why I would like to give you some additional insights, focusing on developments in the second quarter, which provide a clearer picture on the COVID-19 impact.
Our industrial business was facing strong headwinds. The automotive business area was hit hardest as a consequence of production shutdowns in many countries. Also, the other adhesives businesses faced significant headwinds from pandemic related production shutdowns.
Comparably smaller part of our overall Adhesive Technologies portfolio was largely unaffected such as our adhesives for consumer goods business that in part even experienced higher demand such as for tissues. Our hair professional business has been confronted with very significant pressure from enforced hair salon closures in key regions and countries. In turn, we could capture increased demand for at-home colorations.
Laundry Care overall was influenced to a comparably lesser extent by the pandemic. Besides some country loading and deloading effects in certain weeks, we saw a strong performance in heavy duty detergents, while some other Laundry Care segments like special detergents or laundry sheets have been negatively impacted by COVID-19 due to a shift in consumer focus.
Our more hygiene related categories, on the other hand, experienced some tailwind from higher demand due to increased consumer awareness for health and hygiene, particularly in the Soap segment and for automated -- and samples for surface cleaners.
Furthermore, with people staying and cooking more at home, categories such as automated dishwashing saw strong results. In contrast, social distancing negatively affected the styling category.
From a channel perspective, COVID-19, for sure, accelerated the shift to e-commerce. And it is offering emerging opportunities from stronger hygiene demand, which we are capturing with targeted offerings and a step-up in communication. And I will get to that into more details later.
I'd like to use this opportunity to thank all our 52,000 Henkeliners for their dedication and commitment. And I would like to thank my Board colleagues and the global and regional crisis teams for their tireless efforts to protect the health, the safety and the wellbeing of every single employee.
Thanks to their strong commitment, we managed to safeguard jobs and compensation, launched an extensive global solidarity program and navigated our businesses successfully through this crisis. I am proud to see how we master the challenges together and respond quickly and decisively.
Wherever possible and needed, our people are in home office, which is working extraordinarily well, supported by a strong digital workplace concept. Depending on the situation in individual countries, they are gradually returning on site. Under the highest hygiene and safety measures, operations continued worldwide to supply our customers and consumers.
As already outlined in our Q1 call, most of our sites remained operational through the first quarter. At the end of March, 90% of our production sites were running. Since, the teams managed to reopen the remaining production sites with the last ones resuming production by mid-June.
As a company with a longstanding tradition as a family business, it is our responsibility to make a contribution to fighting this global crisis. With the launch of our global solidarity program, we engaged in financial aid, product donations and the production of disinfectants at our site. So far, we supported 470 COVID-19 related projects in 43 countries, benefiting almost 5 million affected people.
This did not come for free. We incurred about €40 million additional costs to manage the situation, for example, for protective equipment or donations. While we are managing short-term challenges exceptionally well, we have kept sight of the medium and the long-term, shaping the company to build on our purposeful growth framework.
The last five months have shown that we set the right priorities with our new strategic framework, and we started to successfully drive future oriented initiatives along the six pillars. With a winning portfolio, competitive edge, future ready operating models and a collaborative culture with empowered people at the heart, we want to build on our strong foundation and outgrow our markets through superior customer and consumer value, differentiate ourselves as a leader in sustainability and develop our people to grow with a sense of belonging.
So, our commitments stay unchanged, including our first set of actions we defined as a starting point of our journey. Overall, we are well on track in executing the targeted measures. In some regards, we have to adapt to the current situation, but at the same time, we are also able to leverage emerging opportunities to drive the envisioned changes.
Let me give you a bit more color on our key milestones and the achievements. Rigorously shape a winning portfolio, we identified brands and categories with a total sales volume of more than €1 billion, predominantly in our consumer businesses and marked half of this amount for divestment or discontinuation by the end of 2021.
We are fully committed to execute the announced portfolio measures in the defined timeframe and already divested to or exited businesses with a sales volume of around €80 million in the first half of the year. The majority of these sales were coming from Adhesive Technologies with businesses that were not part of the core of the industrial portfolio anymore.
For both, Beauty and Laundry & Home Care, there are small discontinuations up to now. In the current environment, we have mostly focused on setting up divestment processes to be ready when markets come back.
M&A is an integral part of our portfolio strategy. In the past days, we signed two compelling acquisitions. In total, we invested about €0.5 billion utilizing our strong balance sheet. We signed an agreement to acquire a 75% stake in a Beauty Care business comprising three fast growing premium direct-to-consumer brands: HelloBody, well known for premium skin, body and hair care products; Mermaid+ Me, strongly positioned with its premium hair care products; and Banana Beauty, a frontrunner for decorative cosmetics, such as lipsticks and eyeliners. All three brands excite more than 1.5 million active consumers. And in the last 12 months, the business has generated sales of around €100 million.
Adding strong digital capabilities and unique brand-building expertise, the acquisition is a clear strategic fit. We increased the scale of our D2C activities and advanced our one-to-one consumer interactions. Hence, we strengthened our competitive edge in the Beauty Care market.
We signed a second agreement to acquire a portfolio of attractive consumer sealant products, highly complementary to our existing portfolio to strategically strengthen our Adhesive Technologies business. The business is marketed under the iconic GE brand, with focus on the North American market. It has an excellent and diversified distribution network. We have home improvement centers, major retailers, hardware stores as well as professional outlets.
In 2019, the business generated sales of around €100 million. With this acquisition, Adhesive Technologies will broaden its position in the region expanding into silicone sealants.
Today, as relevant as ever, it is critical to accelerate with impactful innovations to gain competitive edge. Let me deep dive into all three business units. In Adhesive Technologies, with a broad industry portfolio for sealing and impregnation technology solutions. In a joint collaboration with one of the major smartphone brands, we launched a new product line to increase the water resistance of high-end smartphones. This is supporting a consumer trend where Henkel is best positioned to leverage innovative materials and processes across end markets and develop new market solutions for true wireless headphones, tablets and laptops.
In Beauty Care, we continuously strive to leverage the key trends, such as nature and sustainability. The recent launch of Simply Color is a perfect example. The team has developed an innovation based on the natural trends in the more technological category of hair coloration for the U.S. market. Simply Color does not contain ammonia, silicones or alcohol, and comes with 100% recyclable packaging and was awarded brand of the Year 2020, helping accelerate market share gains in the U.S.
In Laundry & Home Care, I have highlighted in March how we intend to leverage the strategic Caps segment with targeted innovation. Under our iconic mega brand Persil, we have introduced our breakthrough 4in1 DISCS in 2019. To build on their impact, we extended the successful range with targeted variants, for example, Persil DISC against bad odors or our OXI DISC variants in the U.S.
Our strategy is proving successful. Persil DISCS are by now making up almost 10% of our overall Persil sales and have been winning global market share of roughly 500 basis points year-over-year, especially in our active markets in Europe.
Despite our second follower disadvantage at the beginning, we have been outgrowing the Caps market since. And we are confident that we will continue our growth story winning with consumer relevant innovations.
We catered the needs of our consumers during the pandemic. We put increased focus on hygiene related products across our consumer portfolios. Here, we were able to step up speed and agility to offer fast-track innovations and convince with targeted communication campaigns.
Let me stress two impressive Beauty Care examples. First, building on a strong brand equity promoting hand hygiene, our beauty care brand, Dial, generated more than 25% organic sales growth in the first half year and increasing penetration reaching around 10 million new household buyers. For sure, we had a tailwind from increased consumer awareness for hand washing and hygiene, while we could also grow distribution and gain market shares.
The new hand sanitizers from our brand Fa were born within eight weeks from idea to launch. They are also sold via new channels, such as vending machines at the Dubai Airport and public places in the Middle East/Africa region.
Our Laundry & Home Care teams quickly replied to the increased demand for hygiene, health and safety, as well with the development, launch and the rollout of a strong product pipeline covering disinfection, antibacterial and hygiene products.
For example, the all-purpose cleaner General disinfection in Egypt and Lebanon or Pril antibacterial that we will rollout in the Middle East/Africa region in the third quarter. We are underlining our product performing, stepping up our hygiene cleanness communication across the portfolio and relevant channels, including consumer education and support.
An important element of our innovation strategy is to consistently support our innovations and brands, with targeted investments in core categories and regions. For the year 2020, we aim to further step-up our growth investments by €200 million compared to 2019 or €350 million compared to 2018.
In the first six months, despite the macroeconomic challenges, we kept this commitment and stepped up our growth investment in marketing, digital and IT, according to plan by a high double-digit million euro amount, especially in Laundry & Home Care.
We decided to invest in impactful innovations such as the Persil 4in1 DISCS, as well as our Bref De Luxe series with targeted campaigns. This translated into market share gains and an overall significant organic sales growth.
In Beauty Care, we increased, for example, media support for iconic brand, Dial, which I mentioned already before. As part of the new campaign, we strengthened the core brand equity of caring for hands for over 70 years. In digital, we allocated additional investments among others to further enhance our digital infrastructure and for cyber security, also in light of requirements from the COVID-19 pandemic.
Moving to sustainability. To reinforce our leadership in sustainability, we aspire to boost sustainability as a true differentiator, and we are making good progress, for example, in anchoring our new plastic strategy. All Pril bottles in Europe are made of 100% recycled plastic, and our new Pril 5 Plus actively contributes to less water and energy consumption with its innovative self decreasing action formula developed to replace the presoaking phase of dishwashing.
We further built on our Pro Nature range by launching Somat and Bref Pro Nature. Available in 30 countries, all Pro Nature products include up to 99.9% natural ingredients and up to 100% recycled plastic packaging. The hand dish wash and trigger bottles are even made of 50% Social Plastic.
Also in our Beauty Care business, sustainability is a key part of the innovation strategy. The team has launched solid shampoo, body and face bars under both brands, Nature Box and N.A.E. with zero plastic. One shampoo bar, for example, equals the washing performance of two bottles of liquid at 250-milliliter each, a strong potential to have a lasting impact in the fight against plastic, which is highly valued by our customers. In the first half year of 2020, our Nature brands were achieving mid double-digit sales growth.
Going forward, we will accelerate our activities to promote a circular economy with clear initiatives. We test, iterate and scale future shaping projects such as refill stations for selective product categories to reduce packaging waste.
We are not only doubling down on sustainability in operations and innovations, we are setting a benchmark also in financing. I am proud to say that as the first company globally, Henkel concluded a plastic waste reduction bond. The proceeds will be allocated specifically to projects and expenditures related to our activities to reduce plastic waste, following the syndicated green loan, another proof of our ability to combine attractive corporate financing instruments with progress in sustainability.
With Adhesive Technologies, sustainability is developing into a key differentiator in global competition. As a leader in adhesives, sealants and functional coatings, we are setting benchmarks and enable our industrial customers to achieve their sustainability targets with high impact solutions.
Being a partner of choice for the packaging industry, we are actively supporting a circular economy by working closely with partners to develop sustainable yet functional solutions. With LOCTITE LIOFOL, we introduced a certified recyclable heat and cold seal coating into the market, which enables the replacement of polyethylene with paper suitable for a wide range of food and non-food packaging. Here, we are setting new standards in terms of recyclability, food safety and flexibility and actively contribute to a circular economy by enabling new packaging designs with our solutions.
With our consumer centric codevelopment approach, we successfully combine material expertise and engineering support and help to shape the world's transition to a low carbon economy. The mass production of electrical vehicles is one of the biggest transformations for the automotive industry in this regard.
As a strategic supplier and partner, we developed a silicone free liquid gap filler for battery packs. Our solution is facilitating larger battery pack designs, improving reach battery pack recycling and waste reduction.
Finally, we launched our high impact BONDERITE hot sealing additive, a cost effective anodizing solution, which enables doubling of the standard life span of sealed parts and increase in the productivity of single step hot sealing by more than 20% and reduction of the makeup of the bath by 50% or more reducing the CO2 footprint.
Moving on now to digital, where we are shifting up gears in the current environment. In the first half year, we recorded a strong increase in digital sales of more than 60% in Beauty Care and Laundry & Home Care combined. For the group, the digital share in overall sales is approaching now the mid teens, a strong progress.
What are some of the driving forces? In Beauty Care, we are further leveraging eSalon. As consumers, often unable to go to their hair dressers, orders of personalized hair coloration for home use significantly increased. First orders grew more than three times year-over-year. First plus repeated orders led to high double-digit growth. In June, the team extended eSalon to male coloration, addressing a promising complementary target group.
In a test and learn approach, we have also launched our first in-house developed B2C retail platform, Schwarzkopf in France in only a few weeks from idea to launch. Also, in Laundry & Home Care, we achieved very strong double-digit e-commerce growth, accelerated by COVID, but also driven by increased investments. Our expanding e-commerce ready product portfolio paired with our agile management and targeted channel investments were the right formula at the right time.
Finally, we stepped up our activities in eCRM consumer relationship management, boosting our one to one consumer relationships and realizing notable cross and upselling potential. Ask Team Clean is the first community on all laundry care and home care related topics in Germany and now also present in seven additional markets in Eastern Europe via social media.
Let me also highlight that our new digital business setup is live, a real step change for us and a strategic game changer in the future. It is compromising our IT organization, business process experts and our former CDO organization. With these joint forces and unity of effort approach, combining our businesses, functions and digital, we strive for a new level of digital expertise and exceptional impact in the future.
I spent some time on our central three pillars of our strategic framework. Because in order to win the 2020 through purposeful growth, we have to establish a unique position in our target markets and develop a competitive edge.
Nevertheless, future ready operating models across the company are of equal importance because they will determine our ability to execute what we intend to do. We successfully completed the operational model changes for Adhesive Technologies business. In Laundry & Home Care and Beauty Care, we are well on track with a focus to empower the frontline and enhance regional focus to drive customer and consumer proximity and to benefit from leaner structures. And we completed the reorganization of our purchasing organization in order to enable an even stronger focus on operations and proximity of business.
Every successful transformation begins with a cultural transformation, and since the beginning of this year, we really accelerated our cultural journey with our leadership commitments at the core. They were designed from employees for employees. This year, we took action, finalized the rollout and started to live up to them in a challenging environment. The crisis created a moment of truth for, really, company culture.
From the very beginning, me, my board colleagues and our top leaders took actions. We stepped up our communication to our employees, for example, via video messages and virtual town halls and encouraged grass root initiatives across the entire company. We took important steps to support our community and affected business partners. We reconnected with our values and looked with pride at how every single employee responded.
I was impressed to see that across all countries, levels, business units and functions. We revived our entrepreneurial spirit, collaborated as strong teams with passion and owned our results. We aspire to shape a new and better normal and will leverage our learnings.
This means to discover new ways to connect, understand the value of our ecosystem and reach new levels of speed and efficiency. Culture always matters, but now it matters more than ever. We will continue our cultural journey with passion and commitment.
Wrapping up, we have the right strategic framework in place and successfully started our purposeful growth journey. We started shaping our portfolio with divestments accounting for €80 million sales and two value enhancing acquisitions for €0.5 billion.
We stepped up innovation with new approaches and impactful launches supported by increased investments. We understood the importance of catering the increased hygiene and cleaning needs of consumers and we'll closely monitor and respond to market dynamics. We started to reinforce our leadership and sustainability, which is deeply rooted in our DNA and must become a strategic differentiator in the future.
We achieved a strong increase in digital sales of more than 60% in our consumer businesses, and on group level, a digital sales approach, a share in the mid teens. Our new digital business setup is live, and the execution of our operating model changes is completed or well on track. We finalized the rollout of our successful leadership commitments equipped to tackle rising challenges and realize cultural opportunities.
Today, we are only five months in execution and we have already made strong progress. While I'm proud to see a powerful start to our journey, relentless execution of our defined measures, incorporating our market realities, remains key. This is our aspiration.
I'd now like to hand over to Marco, who will lead you through our financial performance in the first six months of the year in more detail.
Thank you very much, Carsten and good morning, everyone, also from -- so good morning, everyone, also from my side. Let's dive straight into the financials for the first half year.
Organic sales development was negative at minus 5.2% over the first six months. This was, in particular, due to declining volumes at minus 4.4%. Both Adhesive Technologies and Beauty Care were heavily affected by the COVID-19 pandemic and recorded volume reductions in the low double-digit and high single digit percentage, respectively.
Laundry & Home Care in contrast achieved a significant increase in volumes. Pricing was slightly negative at minus 0.8% on group level. This was driven by lower average pricing in our consumer goods business units. Adhesive Technologies showed a very resilient pricing performance and kept prices stable in a high demanding market environment.
The net effect of our acquisitions, divestments had a positive impact on sales of plus 0.3%. Currencies had a negative effect of minus 1.1%. And in total, Henkel recorded a decrease of 6% in nominal sales to €9.5 billion in the first half of 2020.
Moving on now to the organic sales development by region. Overall, mature markets were negative with an organic sales development of minus 6.9%. Our businesses in the emerging markets at minus 2.6% were also lower than the prior year period.
Both North America and Western Europe were lower year-on-year by mid to high single digit percentage. This was due to a substantial decline in industrial demand and widespread shop closures caused by the governmental lockdown decisions in almost all countries of the regions, in particular, in the second quarter.
Performance in Asia-Pacific overall was negative at minus 6.4%, due to significant and broad-based decline in the region's emerging markets. In most countries outside China, the situation materially worsened in the second quarter.
In China though we recorded good organic sales growth in Q2 after very weak Q1 triggered by the COVID-19 outbreak early in the year. The mature markets of Asia-Pacific overall achieved positive organic sales growth in the first half of the year. Q2, however, was negative.
At minus 11.4%, Latin America recorded a strongest regional decline in half year one, given the significant headwinds from COVID-19 and a relatively high share of adhesives and professional hair.
In the Africa, Middle East and Eastern Europe regions, we achieved overall strong sales growth, but also here the development in the second quarter was much weaker compared to the first quarter.
Let's have a closer look at the quarter -- quarterly sales trend and that also gives you more color on the development over the two quarters. On Henkel Group level, sales declined organically by minus 9.4% in the second quarter compared to an almost stable development of minus 0.9% in the first quarter. Both Adhesive Technologies and Beauty Care professional experienced unprecedented pressures on volumes, as most countries were mandating public lockdowns as well as shop and production closures triggered by the COVID pandemic.
In many cases, the restrictions were capturing -- were only gradually lifted over the course of the second quarter. As a result, Adhesive Technologies and Beauty Care posted a substantially more pronounced decline of minus 17.4% and minus 12.8%, respectively in Q2 compared to Q1.
Nevertheless, it is worth noting that those businesses affected most by the pandemic. We recorded gradual recovery trends towards the end of the second quarter. Adhesive Technologies ended the quarter with a decline of around minus 10% in June. And professional hair closed the quarter down in the mid teens percent, strongly improved compared to high and mid double-digit declines in April and May. This gradual recovery continued in July. Laundry & Home Care, on the other hand, sustained a very strong gain sales growth in the first half of 2020.
As long as this health crisis persists, we will continue to constantly readjust and respond flexibly and swiftly to developments in our markets. We have been implementing concise operational measures and adapted to the local needs with high agility in supply chain and production.
At the same time -- and Carsten elaborated on this -- we're also focused on capturing opportunities triggered by changing market dynamics, as well as demand and usage patterns. We also put strong focus on costs and net working capital management.
In the first half, we realized short term savings of about €70 million, while not compromising on our future growth. We can build on a strong financial foundation with continued low debt levels and our strong A rating, which was just reconfirmed.
We have sufficient financial flexibility and fast access to capital markets at attractive conditions. This is evidenced by our most recent bond placements, including our innovative plastic waste reduction bond as mentioned by Carsten earlier.
In addition, we have substantial short term flexibility in our financing, in case, we need it, with cash and cash equivalents of €2 billion, undrawn credit lines and commercial paper facilities of about another €2 billion and further headroom in our debt issuance program. Also, our bond maturity profile is very balanced.
Let me provide more color on the half year performance of our business units, now starting with Adhesive Technologies. Adhesive Technologies was strongly impacted by the COVID-19 pandemic. Driven by significant declines in industrial and automotive production in the first half, the business unit recorded a negative organic sales growth of minus 10.9%. We faced an overall negative development of demand with sequential declines from the first to the second quarter.
Within Adhesive Technologies, business areas were affected in different ways. Automotive and metals showed the strongest impact, resulting from global production closures in the automotive industry. The crisis peaked at the end of March until end of April, while a slow recovery started thereafter. In China, however, our automotive markets and metals business stabilized during the second quarter.
Our business area packaging and consumer goods recorded an only modest impact from COVID-19. Within the business area, the consumer goods business developed positively, driven by organic growth in the second quarter.
Within our electronics and industrials business area, the industrials business was particularly impacted by pandemic related production stops. Our electronics business, in contrast, recorded a positive development as a result of strong sales initiatives and pandemic related inventory buildup.
Craftsmen, construction and professional had an overall negative development in the first half year. In particular, our construction business could not continue its strong growth from the first quarter.
As a consequence of these trends, the business unit's organic sales development was driven by significantly lower volumes at minus 11.1%. Pricing was flat in the period under review with similar developments in the individual quarters. Given the current market environment, this is a very strong achievement.
Thanks to the robust pricing and cost efficiency measures, combined with the roughly neutral direct materials impact in the first half, we were able to almost maintain our gross margin despite transactional currency headwinds.
The adjusted EBIT margin of Adhesive Technologies nevertheless came in 500 basis points lower, closing the first half 2020 at 13.1%. This was due to lower sales volume and a negative fixed cost absorption related to this.
Net working capital increased slightly by 80 basis points to 14.4%, a very competitive level given the current market dynamics. The increase was to a large extent driven by lower demand and subsequently high inventories in percent of sales.
Beauty Care recorded an organic sales development of minus 8.5% in the first half in particular driven by declining volumes. Average prices were slightly negative. This development was driven by the hair professional business, which was significantly affected by governmentally enforced salon closures, especially from March onwards. After the trough in April, we have seen the business recovering since May, as more and more salons reopened, and businesses and consumers got accustomed to the new hygiene restrictions.
In retail, we recorded mixed developments. More than half of our relevant retail markets were negatively affected by the spread of the COVID pandemic, especially styling, deodorants, as well as skin and haircare.
Despite these headwinds, organic sales development in our retail business was almost flat, thanks to a strong performance in hair coloration and body care. This was, in particular, due to an increased demand for at-home coloration and hygiene related products, as well as strong product launches and communication, which resulted in global market share gains in both categories.
Our U.S. brand, Dial, with its antibacterial positioning, recorded an exceptionally strong performance with organic sales growth of more than 25% in the first half year.
Our retail business was able to gain market shares in North America, Middle East, Africa and Eastern Europe. Nevertheless, organic sales development in retail was negatively -- negative in Middle East, Africa, Eastern Europe and Western Europe in the first half. In contrast, we recorded double-digit percent growth in North America and positive organic sales growth in Asia-Pacific mainly driven by China.
Driven by online and direct to consumer businesses, Beauty Care achieved a strong boost in digital sales, by more than 70% with initiatives across both retail and professional.
The adjusted EBIT margin came in at 9.4%, 410 basis points below the prior year period. The key driver of this development was lower sales volume in professional hair. With both gross margin and the share of fixed costs in this business structurally higher than in the retail business, the effect from lower sales volumes on profitability has been disproportionate.
Some headwinds in direct material prices, unfavorable transactional currency effects and negative sales mix resulted in declining gross margin.
Net working capital improved to a level of 3.9%, 210 basis points lower compared to the end of Q2 2019, a good development driven largely by improved accounts receivables, for example, in the Chinese retail business. The significant decline in hair professional sales volumes had a counteracting effect resulting in higher inventories in percent of lower sales.
Let's move to Laundry & Home Care now. The business unit achieved an overall very strong organic sales growth of 4.9% in the first half 2020, predominantly driven by higher volumes while pricing was negative.
From a category point of view, Home Care was the key driver of this performance showing a double-digit organic sales growth. This was thanks to strong product launches, but for sure, also benefiting from the increased demand for hygiene products. Worth noting that our core brands, Pril, Bref, Somat, each recorded double-digit growth.
Laundry Care recorded good organic sales growth, in particular driven by a strong performance in heavy duty detergents. This was, to a large extent, due to the continued success of our mega brand Persil, which achieved a double-digit organic sales growth, also thanks to strong demand for our new 4in1 DISCS.
Laundry & Home Care has been growing organically in each region; Middle East, Africa, Eastern Europe and Asia-Pacific. We even recorded double-digit organic sales growth. Importantly, we were able to grow our market shares in high growth regions, as well as in Western Europe, within the especially strong performance in Eastern Europe.
In North America, we recorded a positive organic sales growth in the first half. However, we continued to underperform and lose market share. While demand for our products was strong throughout the period, our regional product offering in Home Care and, especially in bleaches, which is a key driver of market growth is low.
In addition, we faced significant challenges in our U.S. production network and missed out growth opportunities. We experienced extraordinary production downtime due to an earthquake at our production site in Salt Lake City, as well as an extraordinary outage of our St. Louis plant.
Availability of production capacity was also impacted by effects related to the intensified spread of the COVID-19 pandemic in the region, in particular at our largest U.S. production facility, Bowling Green. Meanwhile, production is almost back to normal levels.
On a more positive note, Laundry & Home Care delivered a very strong performance in the strategically important e-commerce channel, with digital sales up in the mid double-digit percent range.
The business unit's adjusted EBIT margin came in at 15.3%, 160 basis points below the prior year period. Our gross margin improved slightly year-over-year. Here, our continued focus on cost management compensated for still persisting headwinds from high direct material prices, transactional currency effects and negative pricing. The main driver behind the decline in the margin were the high investments in marketing supporting the continued launch of our impactful innovations.
Net working capital in percent of sales improved significantly by 350 basis points to a level of minus 6.2%, a very strong performance, mainly driven by improvements in accounts receivables and accounts payables.
Back to the Henkel Group. Taking a closer look at the adjusted income statement, Henkel recorded an adjusted EBIT margin of 12.6% in the first half of 2020, minus 370 basis points year-over-year. Group adjusted gross margin at 46.4% was almost flat compared to prior year.
Most significant driver of the decline in the adjusted EBIT margin was an increase in marketing, selling and distribution expenses, both in absolute and relative terms. In percent of sales, they increased by 280 basis points to a level of 26.7%.
About half of the relative increase is due to the lower sales level. The absolute increase is, amongst others, a result of the step-up of growth investments in marketing, digital and IT, a high double-digit million euro amount in the first half, as well as higher transportation costs.
R&D and administrative expenses in percent of sales also increased in the first half year by 20 and 50 basis points, respectively. The expenses in absolute terms did not materially change.
Looking at the detailed bridge from reported to adjusted EBIT now. Our reported EBIT came in at €1.94 billion, 27% below the previous year. We record one-time gains of €3 million in the first half, one-time charges of €21 million, mainly related to the termination of a long-term IT service contract.
Restructuring charges amounted to €78 million, €66 million below the prior year period. The main focus areas were on optimizing our structures in administration operations, as well as our go-to-market models.
Let's move further down the P&L. Adjusted EBIT totaled €1.2 billion, 27.5% below the prior year figure. The financial result amounted to minus €52 million in the period under review compared to minus €41 million in H1, 2019.
Adjusted taxes on income amounted to minus €290 million. This corresponds to an adjusted tax rate of 25.5%, 1.2 percentage points higher year-on-year. Adjusted net income after minorities amounted to 847 million, and this translates into adjusted earnings per preferred share of €1.96, down 29.2% compared to the first half 2019 or at constant exchange rate minus 28.2%.
Cash flow performance and financial position for the first half. On group level, the ratio of net working capital to sales reached 4.4%, a strong improvement of 230 basis points year-over-year, driven by our consumer businesses. We recorded a free cash flow of €0.9 billion, only €52 million below the prior year, which was the highest half year free cash flow in Henkel's history. Here, the impact from lower operating results was largely compensated by a better working capital, cash flow compared to H1, 2019.
In addition, we recorded positive effects from changes in pension obligations, which were about €130 million higher than in the prior year period. As a result of our strong free cash flow, our net financial position improved by about €100 million, ending the half year at minus €2 billion. This includes the cash impact resulting from the dividend payout to our shareholders of in total €800 million in the second quarter.
Moving on now to the full year outlook. The further development of the COVID-19 pandemic and its implications on economies and societies remain highly uncertain and are impossible to predict. Operations in China have been normalizing and the situation in Western Europe is improving. Many customer production sites have been coming back to operations.
Hair salons are adapting to the hygiene regulations, approaching more normal business levels. And also consumer demand started to normalize in many categories, while high unemployment rates are weighing on spend levels. However, globally, infection rates continue to rise.
In many key regions, public lockdowns continue or are further tightened. In other regions, they are being reintroduced to counter a second wave of infections. Against this uncertain macro environment, we continue to not provide a forecast for the full year 2020 at this point in time.
Nevertheless, based on current market dynamics and assuming the continued recovery of industrial production and customer demand, from today's perspective, we expect that Henkel's sales will continue to gradually recover in the third quarter. And, of course, as soon as possible to make a sufficiently reliable evaluation of Henkel's financial development in 2020, we will publish an outlook.
With this, let me hand back to Carsten.
Thank you, Marco. Before we move onto the Q&A, I'd like to outline our key business priorities for the second half of 2020 and beyond.
In this unprecedented crisis we as a management, board, care and react. Protecting the health, safety and wellbeing of our employees, their families, our customers and strategic partners remains our highest strategic priority.
With a broad set of support measures and a clear transparent communication, we collaborate closely with our customers and our business partners to master the challenges together. We are capturing emerging opportunities with agility and with a strong entrepreneurial spirit.
We are accelerating our digital transformation, further enhancing our digital capabilities and expanding digital sales across our all business units. Last but not least, we retain our strong focus on liquidity, while we continue to monitor and adequately manage cost, working capital and CapEx.
And finally, we continue to execute our strategic framework and constantly evolve it to shape our purposeful growth agenda.
Let us now move to the Q&A. We can extend this call a bit to make sure your questions are covered. But I wanted -- together with Marco, take the time to lead you through the results and the framework where we are standing.
So, with that, ladies and gentlemen, the floor is yours.
Thank you, Knobel. [Operator Instructions]
Our first question is coming from the line of Iain Simpson from Barclays. Please go ahead.
Good morning, everyone. A couple of questions for me, please. Firstly, could you expand a bit what's going on with your China Beauty business? You're talking about a very strong performance there. So, the destocking issues are clearly now well behind you. It'd be great, if you could talk a bit about the drivers of your acceleration in that market?
And then secondly, can we dig into U.S. laundry manufacturing a little bit? So, you had a period where your on-shelf availability was very poor, I'm guessing. Has this now been resolved? Any delistings or similar retailer issues as a result? Just trying to gauge the likely pace of recovery in that business. Thank you very much.
Thank you, Iain, for your question and good morning. To your first question, to your China Beauty one. The positive performance in China is fueled by continued growth in key accounts and in the e-commerce channel, the challenging development in the offline distributor really continued in the light of relatively slow consumer traffic. I also mentioned that in the consumer businesses, also in Beauty Care, we have grown our digital sales by more than 60% combined. And for sure also here the situation what I described just before is, for sure, positively impacted by that. So, Henkel's China business is operating on a healthy P&L structure.
The trade inventory has mostly normalized with some further improvement expected by the end of the year or to the end of the year. And I think that's also in line what we told you in last year where we said we have -- yeah, I would say, cleared up most of the things in the year 2019 and only a few topics were remaining in 2020. And here, we are well on track and working accordingly. That's to your China question.
And then, for sure, the U.S. laundry, definitely, for sure, is on your attention. But maybe to give you some more glance on that -- Marco already alluded a little bit to that. But we recorded a positive organic sales growth in the first half year of laundry in North America. However, we continued to underperform and we loose -- we lost market shares for two main reasons.
The first one in terms of portfolio. While the demand of our product was strong throughout the period, our regional product offering in Home Care and, especially in bleaches, which is the key driver of the overall market growth in the current environment, is low. And in addition, we faced significant challenges in our U.S. production network, as Marco alluded, but I can, for sure, also go again into that. We experienced extraordinary production downtime due to an earthquake at our production site in Salt Lake City, as well as an extraordinary production downtime at our St. Louis plant. And in addition, the intensified spread of the COVID pandemic in the region aggravated the situation and in particular, at our largest U.S. production facility in Bowling Green.
All these incidents impacted service levels and the availability of product, particularly in April, where the service levels in May and, especially in June recovered, thanks to the fast implementation of countermeasures.
So, today, production is back more or less to normal. And it is worth highlighting that despite these effects, we have seen the situation that we could grow our market shares in the strategic growth segment of the single unit doses product, which I also alluded, I said about around 500 points of market share gains in that category. And with this, we are confident that we will be able to return to a more competitive development and now that these extraordinary production issues are behind us and in June and July, we have seen also first recoveries also on that.
Hope that clarifies.
Very clear.
Yeah.
Very clear. Glad to hear it’s back on track. Thank you.
Thank you, Iain.
The next question is coming from the line of Christian Faitz from Kepler Cheuvreux. Please go ahead.
Yes. Thank you. Good morning, Carsten. Good morning, Marco and good morning, rest of the team. Two questions, please from my side. First of all, in adhesives, how has demand trended sequentially through the quarter? I know that Marco alluded to that, but also how has it trended into Q3? And can you also maybe highlight that for customer segment, i.e., automotive, construction, et cetera?
And then in beauty, is the hair salon business back on track? Or are people still hesitant to see a haircutter due to hygiene reasons? Thank you.
Christian, first to the adhesive situation. As you said, I think Marco already gave some detailed explanations, but what we have seen is a gradual improvement. So, the -- as I said, in general, the peaks -- the negative peaks were in April and in May and we covered in June. And also, as I said, and also Marco repeated it, also in July we have seen a recovery and a broad-based recovery. That means in the segment -- in all the segments in which we are working.
And I think that is more in terms of trading -- we can't give you for sure. We have not -- due to the fact that we are not still able to make an outlook. Therefore, we said something also to July in order to give you more insights in terms of that July is -- regarding to all three businesses, improving.
And that leads me to your second question, where you wanted to have some more insights in the professional business. Also here, Marco told that we had a minus 30% overall in professional in the first half. And after the tough situation in April, we have seen that the business was recovering since May and closing the quarter with the organic sales growth in the mid teens.
However, the reopened salons often don't work at full capacity due to the hygiene restrictions. We support their come back with decisive measures, such as hygiene articles, products for speed services and targeted salon communication. But also here in July, we have seen a continuous improving situation in comparison to the situation in quarter and therefore, an improving trend.
Okay. Thank you very much.
You are welcome.
The next question is coming from the line of Richard Taylor from Morgan Stanley. Please go ahead.
Good morning, everyone. Thanks for the questions. It sounds like you're making some good progress. I was particularly interested to hear your comments on cultural change. I'd like to press you to be a little bit more specific on that. I know you've committed some mistakes in the past. But what specifically needed to change culturally as an organization? Is this about getting away from a cost savings mindset to a growth mindset? That's my first question.
I've got a really quick one, a housekeeping one. You often call out the IPX index for adhesives. If you could give us your current reading on that, that would be great.
And then finally, I'd like to hear a little bit more about what you're doing differently in digital. We've heard quite a lot over the last five years about investments in digital. But any details you could give us that you're doing differently, not so much on e-commerce, but sort of digital end to end would be really helpful. Thank you.
Yeah. Richard, let me start with your last question, with the digital part. I think the digital part has different areas which we are touching. The first thing, I think, you see that from an innovation point of view and tackling consumer changes and consumer behavior, I think at the end, the numbers speak for themselves. Yes. We know that we need to accelerate in the area of digital in all our areas.
I think in adhesives, we have built a great e-commerce platform in order to distribute our products. And in laundry and beauty, we are accelerating. And I think this you can see -- if you look at the first half year results, with more than 60% increasing sales growth in both dimensions, which is definitely and therefore, I tried also to be a little bit more specific in examples during the presentation which we have given.
And this also leads then in total that for the Henkel Group, we're approaching really total -- in relation to total sales, the mid teens area, which I think is a clear sign of, yeah, further improving, but also that our measures are getting also into execution. And the other part is also related with the launch of our digital business setup, dx, creating the next -- I think combining the different areas in business, in IT, in business process owner -- organization. These are the things which will definitely help us to further improve. And yeah, I would say that's for the digital part.
I will now let Marco explain a little bit the IPX part before I then come back to your last question of the -- first question the culture. Marco?
Sure. Richard, to your question on IPX. IPX is, obviously, the industrial production index that we also use as a macro indicator that is particularly relevant for our adhesives business. And what has been recorded on the IPX in the first quarter more at the beginning of the year, was a decline of 3.4%. And in Q2, that decline has substantially intensified with minus 13% for the full quarter too.
Now what we also have seen over the course of the second quarter is that all the forecasts on the quarter and also the full year has periodically been taken down. So, also here, the trend in the overall market here and we have also seen in the IPX development each update came in lower. However, we have seen now since the last update that also here on the IPX that downturn trend has stopped actually and we saw even a slight upward revision of full year outlook on the indicator.
So, now what the latest version actually says is that the Q3 is forecasted with a minus 6.9% and the Q4 with minus 3.8% so that on the full year, the industrial production is declining by 7.7%. Now that's the latest version.
Within the industrial production, in particular importance also our large -- our automotive segment. And here, the light vehicle production index is of importance. Here, the index recorded a decline of 47% in the second quarter. And also here, like overall, improvements are forecasted, so Q3 minus 12%, Q4 minus 9.8%. So, you see all the forecasts assume recovery over the quarters through and the year.
Thank you, Marco. And Richard, to your first one, the cultural, that is, for sure, something which could take now some minutes, but I tried to be condensed on that. The cultural part is, for sure, highly linked also with our purposeful growth agenda. So, putting growth into the focus means that we are striving really to have an innovation focus versus a pure cost focus. I think that's something -- the efficiency part has been driven over the last couple of years quite positively in our organization and in our company, but to find the balance and putting now the innovation focus more, that is something which we would like also to incorporate in our culture.
And that means also empowering more the frontline, which also reflected in changes in our business models, which we have described also last time when it comes to in the region -- for the region and empower that, but also more entrepreneurial thinking really that trial and error is something which we need, because for sure, not every project which you will do will be a success, but we need also to have a cultural approach, which is also, I would say, fostering that instead of the [indiscernible], which you can always do. And transparency in communication internally, but also to you externally, to the capital markets. Therefore, I think it also took a little bit longer today, because we want to share openly what is going well and what is not going in the right direction. And this is something which definitely will impact our culture.
This will not change from today to tomorrow. That will take time. We take -- and we have this time to develop that and, especially also within that COVID crisis, and I was alluding to that, that has also tremendously helped in terms of bonding the organization, bonding our people together and creating really a new spirit, which is helping us to maneuver through this crisis, but even to get stronger out of this crisis.
Thanks very much.
Richard, highly welcome.
Coming from the line of Celine Pannuti from JPMorgan. Please go ahead.
Good morning, everyone. So, my first question is on Additive Technology. You said that gross margin was roughly flat and all of the margin pressure came from lower fixed cost absorption, yet I see that your performance is much worse than some of your peers. So, could you try to explain why that is? And should we expect some of those negative hedge to continue to weigh on the second half margin performance for you?
The second one is on gross margin and raw material outlook. If you could give us a bit of a scale of what happened in terms of raw material inflation in H1, and what you expect in H2? Thank you.
Celine, before Marco gives you some glance on your question -- detailed question in terms of fixed costs and gross margin and raw material. I'm not sharing your view that our adhesives performance is worse than competition, because I think it's -- related to the point. We are across all categories in adhesives existing, and if we compare our performance on a really category basis to individual peers who are working on that, I think we are well-positioned and we are also performing, from a top line perspective, definitely okay.
But maybe, Marco, you give some more details.
My question was more on margin, not on top line.
Okay.
So, on the margin, very clear -- I mean, we have seen mainly effects from lower fixed cost absorption and for sure, also the business mix plays a certain role, and that at the end was driving then also the margin reduction. We had some slight investments, for sure, also in IT that we had outlined in our strategy beginning of the year. So, part of that also was anticipated also in our prior guidance beginning of the year, if you go back to what we published basically in March. But on top, it's really mainly coming from the lower volume and also mix that we have seen.
So, on the raw materials, for the full year, we do expect raw materials -- market volatility to remain extremely high due to the significant uncertainty also related to COVID-19. However, overall, we anticipate a tailwind in the second half of the year resulting finally in stable direct material prices for the full year 2020.
We do not yet provide further guidance by business unit, but that's the overall trend that we see in the raw material markets and, especially for the second half of the year.
Thank you. Just a follow-up. You mentioned that you made, I think, €70 million of savings. Were those helping at all the additive margin?
To some part, for sure, that also benefited the adhesive margin, because we have seen that across the board.
Thank you.
We will now take our last question from Guillaume Delmas from UBS.
Good morning, Carsten. Good morning, Marco. A couple of questions for me. The first one on adhesives and particularly mobility, because mobility was one of the three mega trends you listed last year in Dusseldorf as providing a natural tailwind to your adhesive business. Now with COVID-19, there's clearly a structural challenge to this mega trend for at least the next 12, maybe 24 months.
So, wondering how do you adapt to this from a cost standpoint, also trying to mitigate the negative mix effect you may see at the gross margin level. And maybe also, if you could remind us, how much of your adhesive business is affected by this constrained mobility? I mean, I would assume 20% to 25% of your adhesive business.
And then my second question. Going back to U.S. laundry, I mean, I understand you had some supply issues in the quarter. But what we are also hearing from your competitors this year is that particularly in the U.S., leading brands seem to be disproportionately gaining shares, driven by consumer preference, driven by retailers simplifying their assortment. So, is it something you would agree with? And if so, are you already seeing some signs of normalization? Thank you.
Guillaume, good morning. To your first question, regarding the mobility topic. So, overall, our automotive business faced impact, for sure, of a slightly lower magnitude since our business with auto suppliers in Europe and North America was continuing in Q1, slightly longer than the OEM business as suppliers partially shutdown at a later point in time.
On the other side, on a positive note, we have one business in the field of electrification of the powertrain of electrical vehicles. So, therefore, I think, for sure, we will also adapt our structures, which is your other part of the question, for sure, going forward, if the things are not coming back, or if the trends of change will accelerate. So -- and overall, the part is what is the impact? The impact is 20% of the adhesives business is related to automotive in this sector.
And the second part of the question, Guillaume, maybe you need to repeat it, because I'm not 100% clear how to understand it.
The second question was on U.S. laundry, because we're hearing that leading brands are gaining more shares than before, and that's down to consumer preference, but also retailers trying to simplify their assortments, the number of SKUs they've got on shelves. So that would mean quite an uphill battle for you being a challenging brand in North America. So, are you seeing this? And do you think we might see some changes going forward, with more SKUs putting back on the shelves?
No. I think you pointed it out before -- and we were also clear on that especially the supply situation impacted, I would say, our market share situation in the U.S. in the first half year. On the other side, we are seeing that we need to have the right innovations. And as I explained it, for example, the 4in1 DISCS, so, this segment is over proportionally growing. And we are gaining in this segment of Caps significantly. We see that as a strategic segment, which is in Europe the case, but also in the U.S. So, for sure, leading brands, I would say, always important and also gaining in that setup.
We have overcome our situation from a supply perspective. And that's for me a point where we now need to really also be in the market, with persuading initiatives, having the product there and then by that persuading also the consumers -- or convincing the consumers that they should buy also with us.
You see -- therefore, I was also pointing on that situation, our investments which we are doing, the extra investments are paying off. We are gaining overall market shares across every region in Laundry & Home Care. So, the initiatives are right and to the point. We need to also bring that in terms of execution now to the U.S. where we definitely are not good enough.
Thank you very much.
You are welcome, Guillaume.
I will now hand over to Mr. Knobel for his closing remarks.
Dear investors and analysts, thank you very much for your questions. Let me close today's presentation with a summary of our key takeaways. Henkel posted a robust first half year performance, despite significant headwinds in an unprecedented, highly demanding business environment. And with this, confirming the breadth and the robustness of our balanced business portfolio, our financial strength and not least, the resilience of our organization.
We are supporting our employees, customers and consumers and business partners during the pandemic, ensuring business continuity, while having a strong focus on capturing emerging opportunities.
We are firmly committed to our purposeful growth agenda and we will continue to drive our strategic initiatives constantly adapting to evolving market dynamics and reality. Due to our solid financial foundation, our strong company culture and our dedicated employees at the heart and our new momentum, we are confident to emerge even stronger from the crisis.
Our low debt levels and a significant financial flexibility will give us room to maneuver. We cannot provide a full year 2020 outlook at this point in time, given the high uncertainty triggered by the COVID pandemic, but we will publish a new forecast once sufficiently reliable and realistic evaluation of Henkel's financial performance in 2020 is possible.
As always, please be reminded of our upcoming events. Our next event will be the release of our Q3 sales performance on November 10.
With this, I would like to thank you for joining our call today. Take care, stay safe and also stay healthy. Thank you. Bye, bye.
Thank you for joining today's call. You may now disconnect.